You are here

Property Tax Exclusion for Solar Energy Systems

Eligibility 
Commercial
Industrial
Residential
Savings Category 
Photovoltaics
Solar Water Heat
Maximum Rebate 

Not specified.

Program Info
State 
California
Program Type 
Property Tax Incentive
Rebate Amount 

100% of system value; 75% of system value exemption for dual-use equipment

Provider 
California State Board of Equalization

'''''Note: The California State Board of Equalization (BOE) approved new [http://www.boe.ca.gov/proptaxes/pdf/lta12053.pdf guidelines] for the Active Solar Energy Systems New Construction Exclusion. The guidelines clarify that the exclusion applies to qualified locally assessed commercial, industrial, and utility-scale systems. '''''

Section 73 of the California Revenue and Taxation Code allows a property tax exclusion for certain types of solar energy systems installed between January 1, 1999, and December 31, 2016. This section was amended by [http://www.leginfo.ca.gov/pub/07-08/bill/asm/ab_1451-1500/ab_1451_bill_2... AB 1451] in September 2008 to include the construction of an active solar energy system incorporated by an owner-builder in the initial construction of a new building that the owner-builder does not intend to occupy or use. This only applies if the owner-builder did not already receive an exclusion for the same active solar energy system and only if the initial purchaser purchased the new building prior to that building becoming subject to reassessment to the owner-builder. ABX1-15 of 2011 clarified that systems installed through sale-leaseback arrangements or partnership flip structures can benefit from this exclusion. Click [http://www.boe.ca.gov/proptaxes/pdf/lta11030.pdf here] and [http://www.boe.ca.gov/proptaxes/pdf/lta11039.pdf here] for Letters to Assessors from the State Board of Equalization that further explain the impact of ABX1-15.

Qualifying active solar energy systems are defined as those that "are thermally isolated from living space or any other area where the energy is used, to provide for the collection, storage, or distribution of solar energy." These include solar space conditioning systems, solar water heating systems, active solar energy systems, solar process heating systems, photovoltaic (PV) systems, and solar thermal electric systems, and solar mechanical energy. Solar pool heating systems and solar hot-tub-heating systems are not eligible.

Components included under the exclusion include storage devices, power conditioning equipment, transfer equipment, and parts. Pipes and ducts that are used to carry both solar energy and energy derived from other sources qualify for the exemption only to the extent of 75% of their full cash value. Likewise, dual-use equipment for solar-electric systems qualifies for the exclusion only to the extent of 75% of its value.

System owners should contact the applicable county assessor's office for further information. Click [http://www.boe.ca.gov/proptaxes/assessors.htm here] for a listing of County Assessor offices in California, and [http://www.boe.ca.gov/proptaxes/pdf/lta08071.pdf here] for a December 2008 letter to the assessor that further clarifies the terms of the exclusion.